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Local brokers: Expect to pay more out of pocket for health coverage

QUICKREAD

WHAT WILL HEALTH INSURANCE PREMIUMS COST?

Though Colorado health insurance carriers have not yet published specific premium rates, the Colorado Division of Insurance released figures that show the range of premium costs based on the type of plan involved.

The Affordable Care Act promises different impacts for different people, according to several local insurance brokers.

Those who already have health coverage can expect higher out-of-pocket costs. Those entering the health insurance market for the first time also will have to pay, but the new financial burden may be offset by improved access to care.

On the Western Slope, both types of consumers can expect to choose from four or five insurance carriers offering a variety of plans, though fewer plans than are available on the market today, Mountain West Insurance and Financial Services broker Jim Sjerven said.

Although out-of-pocket costs, particularly for individual plans, are likely to rise significantly, the act’s impact on monthly insurance premiums in Colorado is unknown, Mountain West Insurance and Financial Services broker Terry Toner said.

That’s because the state’s health insurance carriers have not yet published the premiums they expect to charge, despite the fact their rates were already approved by the Colorado Division of Insurance, Toner said.

What is known about premiums is that an estimated 817,000 Coloradans will qualify for monthly tax credits, or subsidies, to offset premium costs, according to Families USA, a Washington, D.C., health care consumer advocacy group.

People who already have “affordable” health coverage through their employer will not qualify for tax credit subsidies.

Coverage is considered affordable when premiums paid for job-related health insurance are equal to or less than 9.5 percent of annual income (or 8 percent of annual household income), Sjerven said.

Only when premiums exceed that amount can consumers reject their job-related insurance and shop at the online marketplace, Connect for Health Colorado, he said.

Unemployed, self-employed and people employed by companies that do not offer health insurance also are eligible to shop at Connect for Health and all can apply for tax credit subsidies. People employed by companies that offer so-called affordable health insurance are not, Sjerven said.

WATCH THE MAILBOX

Increasingly, people who already purchased individual policies are receiving lots of information about the Affordable Care Act from their carriers through the mail. That’s because Oct. 1 is the first day people can begin enrolling in health plans offered through Connect for Health.

The mail coming from carriers these days is not junk, Toner said.

“Read it. Save it. That’s my first piece of advice,” he said.

Watching the mail also is important because several Western Slope carriers are cancelling individual policies in anticipation of changes coming Jan. 1, the day the act takes full effect.

“Different carriers are handling it differently,” Sjerven said. “Rocky Mountain Health Plans ... sent out letters saying that they are discontinuing their existing suite of (individual) plans Dec. 31. They are sending letters to clients saying that they can continue coverage, but they have to choose one of the new plans starting Jan. 1.”

In the case of Anthem, however, cancellation before Jan. 1 means individual policyholders will get the chance to renew for another year, in effect grandfathering their existing policy through most of 2014, Sjerven said.

OUT-OF-POCKET COSTS TO SKYROCKET

Local insurance brokers expect new individual plans to require policyholders to pay more out-of-pocket expenses – in some cases, much more.

Sjerven said he has reviewed individual plans with deductibles ranging from about $1,500 all the way up to $6,350.

“We don’t know for sure the cost (of premiums for individual plans) but certainly (we know) the out-of-pocket (costs): $6,350 in general for an individual, $12,700 for a family,” said Kevin Scanlon, Mountain West Insurance and Financial Services director of health benefits.

“They talk about the (premium) costs and the subsidies, but nobody’s really talking about the out-of-pocket,” Scanlon said.

The number of carriers and types of plans available on the Western Slope are not likely to increase in 2014, reducing the ability of market forces to lower costs, Sjerven said.

The elimination of screening for pre-existing conditions means all Americans who apply for health insurance are guaranteed coverage. Since medical underwriting, or pre-screening based on health status, will end, carriers must find new ways to control costs.

One strategy will be for carriers to restrict the network of health care providers policyholders can visit for services.

The potential for smaller networks means people must consult with their doctor and other favored health care providers to make sure they can still be seen under the terms of any new plan, Sjerven said.

One of 22 Colorado brokers and the only one from the Western Slope selected by Connect for Health to train health insurance professionals on how to advise clients about the new plans, Sjerven said the best advice for health insurance consumers is to consult with a broker before making any decisions. A broker’s advice is free to the consumer and can help avoid many surprises lurking in the transformed health insurance market, he said.